Vanguard (Lagos)

Nigeria: Chevron 60 Percent Equity - How Indigenous Firms 'Re to Be Excluded - Pengassan

PETROLEUM and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has alleged that it has uncovered a grand design to exclude competent indigenous oil companies from acquiring the 60 per cent equity that Chevron Corporation wants to divest from Chevron Oil Nigeria PLC, and reiterated the association's resolve not to accept any foreign oil company that has no interest in the nation's downstream oil sector to purchase the divested shares.

President of PENGASSAN, Comrade Babatunde Ogun, told Vanguard that part of the design is the current focus being given to potential buyers that bid in excess of 300 per cent over and above the curent market price of N202 of the share at the floor of the Nigerian Stock Exchange. He lamented that this is not only alarming, but a calculated attempt to ensure that the company is grounded after sale, arguing that it would be near impossible for the company to survive from that stand point.

While expressing confidence in the association's strategic alliance with AP which had promised to offer the workers' body a 10 per cent stake of the equity should its bid goes through, the PENGASSAN President argued that the association would prefer any of the three indigenous companies, African Petroleum (AP) Plc, Oando Plc and Zeno Plc, that have shown interest because each of them had all it takes to run the company.

According to him: "We are not confident that the technical and commercial evaluation process in the short listing of the potential buyers guarantees the selection of the most competent hands to effectively manage the company and thus protect the interest of the employers (including our members) who have spent most of their productive years in the service of Chevron Oil Nigeria Plc.

"We are worried about the focus being given to potential buyers that bid in excess of 300 per cent over and above the floor trading price of 202 naira is alarming. PENGASSAN as legitimate employees' representative find this very disturbing, as this clearly implies that the potential buyers are going to incur the incredible bank charges and other related cost of capital to service the loans used to acquire the company.

This means that the profitability of the company cannot be sustained amongst its peers within the industry, which will ultimately impair the company's competitiveness and market shares thereby jeopardising the interest of the employees of the Company. We have observed that some of the potential buyers do not have the organisational structure to manage the current calibre of employees and to also support the already existing best-practice in corporate governance on which the Chevron Oil Nigeria Plc Workers' Union prides itself locally and internationally."

Our Association hereby states in very unequivocal terms that by our statutory responsibility and obligation that is being frustrated by the intrigues in ownership change, the Association will expect that all labour related issues are resolved before the ownership change is announced. That it is also our obligation to protect minority interest of our members as shareholders who in view of their vantage position have observed the detrimental effect of the ongoing ownership change process, hence we maintained that the following criteria be used as the parameter for the selection of the eventual potential buyers:

Bench-markable technical and commercial evaluation process that guarantees the selection of the most competent hands to effectively manage the company and thus protect the interest of the employee (including our members) who have spent most of their productive years in the service of Chevron Oil Nigeria Plc. Competitive transaction process that projects into the threats to the going concern features of the Chevron Oil Nigeria Plc to the effect of realizing that the profitability of the company cannot be sustained amongst its peers within the industry at any incredible bid price which will ultimately impair the company's competitiveness and market shares thereby jeopardizing the interest of the employees (including our members) of the Company.

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